Strictly speaking, neither act nor potency can be properly defined because they are first principles of being. They do not have a proper genus nor a proper differentia. However, they can be described.
The notion of act can only be derived from examples. For example, we say that a thing is in act when it exists, or when it exercises its own existence. A person is in the act of seeing when he or she has the perfection of vision. Thus, act may also be described as perfection.
Potency is best described in relation to act. Potency is the capacity for act.
While potency can be described in relation to act, act cannot be described in relation to potency. Because the first thing known by the intellect is a being-in-act, a being in the act of existing, or an intelligible reality. And we derive the concept of being-in-potency only from the concept of being-in-act.
Between actual being and mere nothing there is a real entity, called potency. Potency is not like privation, which is the simple lack or absence of act. Unlike privation, potency is a possible being in act, whereas a privation is not. For example, blindness is a privation, and doesn’t have any reality except in the mind. It is just a being of reason. On the other hand, prime matter, which is a pure potency, exists in real substances in the world. The latent capacity of material substances to change into a different substance IS its prime matter. This latent capacity is real. Therefore, prime matter is real, but it cannot exist apart from the substance.
Prime matter cannot exist without form because, as pure potency, it is an indeterminate being. But nothing in the world exists indeterminately. Everything that actually exists must exist as a determinate kind of being. Therefore, there is no such thing as pure prime matter or pure potency without form in the world. Prime matter can only exist as co-principle with substantial form in a material substance.